July 28, 2009

Tuesday, July 29, 1930: Dow 240.81 +0.50 (0.2%)

Assorted historical stuff:

President Hoover is riding high, although Republicans are expected to lose Congressional seats in the November election (as usual for the presidential party in an off-year election). President has gotten his way on most major issues including naval arms treaty, flexible tariff, and farm relief, although in some cases he appeared to bungle the negotiations at the time. He's generally reported to be "in a more cheerful frame of mind than he has been for some time."

Editorial: settlement of Mexican government and National Railway debt represents "one more triumph of hope over experience," following previous two settlements attempted in 1922 and 1925; first of these lasted barely 6 months and the next two years. Regarding National Railway bonds, "it should not go unobserved that a mortgage on a national property adds nothing to the security of a loan, which remains wholly dependent upon the owning government's willingness and ability to pay." Mexican reaction is generally more positive, with the newspaper Excelsior's front page headline reading "Mexico has gained a great victory."

Association of unions affiliated with AFL launches movement to block all Soviet exports based on use of convict and forced labor.

Japan plans to deal with severe industrial depression by government aid and planning to eliminate unsound companies, amalgamate smaller ones, and arrange assistance of banks. Also arranging local government loans for unemployment relief

Governor Theodore Roosevelt, Jr. of Puerto Rico credited with improving finances there through economies and better collections [later became only general to land with troops in first wave of D-Day; survived but died one month later of heart attack].

Bethlehem Steel - Youngstown merger trial postponed a day due to heat.

National Broadcasting Co. receives about 200,000 so-called "fan letters" a month to its radio stars. Men write more letters than women, but women write longer ones. Companies encourage the practice to obtain valuable mailing lists.

AT&T announces price of New York-Buenos Aires call cut $6 to $30 for first 3 minutes, $10/each additional minute, equal to New York-London rate.

Market commentary:

Some nervousness at market open due to heavy selling in Warner Bros.; however, major stocks resumed advancing as the session progressed. GM continued advance as did major industrials including American Can, Westinghouse, GE; utilities and copper stocks also strong. Some weakness late, upon which volume again declined. Bonds dull but generally firm.

Increasing opinion that current market discounts the business situation and a rise is now likely. Goodbody & Co. "look for a continuation of general strength this week. Except where pool operations are pronounced, we think the higher prices will be gradual and we do not look for anything but an orderly progress to higher levels."

Some mixed opinion and wait-and-see attitude remains, reflected in continued short interest and large number of below-market buy orders.

Continued public buying power seen in demand for bonds, increases in number of corporate shareholders, and higher savings bank deposits.

New stock trading how-to book published - The Wall Street Stock Selector, sequel to Truth of the Stock Tape. Some rules: never over-trade; don't buck the trend; trade only in active stocks; use stop-loss orders; never average a loss; never let a profit run into a loss. Also lots about using charts to predict future action; author suggests sharp division between insiders and public who, without knowing insider plans, must use stock action to deduce said plans and profit from them.

Economic news and individual company reports:

First 60 railroads report June operating income $58.337M vs. $59.042M in May, $88.371M in June 1929, and $71.540M in June 1928.

Warner Bros. Pictures earnings for six months ended August 30 expected below $5M; previous six months was $10.1M. This will be below dividend requirement; attributed to unexpected decline in movie earnings in current summer.

Coca-Cola net for first half $7.182M vs. $6.492 in 1929.

Companies reporting increased earnings in 1930: Railway Signal, Shaw-Walker (office furniture), Beatrice Creamery.

Courtroom humor:

"Judge - The two men were fighting with chairs. Didn't you try to establish peace? Witness - No, there was not a third chair."

Judge - Did you know the defendant, Pearson? Witness - I had a logical acquaintance with him. Judge - what do you mean by logical acquaintance? Witness - Well, we both belong to the same lodge.

+ The Boring Stuff:

Editorial: Wheat market has been unsettled by reports of large Soviet sales. However these reports are seen as unreliable and partly generated for propaganda. Latest reliable figures are for 1927-28 crop, indicating production at 90% of prewar 1913 level, but fraction offered for sale by peasants over and above their needs only 40% of prewar level.

Aviation industry awaits details of implementation of the Watres bill, to effectively subsidise passenger air traffic (now operating with losses) by allowing air mail to be carried on regular passenger routes, and redistributing existing air mail routes among operators.

New York Mayor Walker receives report from Controller Berry calling for adding 3,893 acres to city parks over the next several years; would bring parks to 9% of total city area.

1,001 conventions held in New York City in year ending April 30.

Market has mostly done the unexpected this year, including recent rally when many expected a dull market until fall. If business improves in fall, market will not wait but should be much higher by then. Recent buying has been by those who should know; they may be wrong as with the rally earlier in the year, but chances are better this time based on historical length of depressions; fall will mark 15-month point since start.

Bonds generally continued quiet "creeping bull market" in past week.

May gasoline consumption in 43 states was 30.553M gallons, down 511,000 from April but up 1.302M from May 1929.

Lumber demand up in week ended July 19; new business from 881 leading mills was 94% of production, best in many weeks; previous week was 79%.

Low prices for eggs, poultry, and butter (down 30%-40% vs. 1929) are affecting farm income; many complaints that retailers aren't passing price declines along.

Canadian wheat acreage has increased from 10M acres in 1909 to 25M this year.

June car sales in Midwest: new down 29.7% from May, 50.9% from June 1929; used down 13.8% from May, 26.4% from June 1929.

June New York department store sales down 5% from 1929. First half sales up 1%. Chain stores down 5% in June, up 3% first half.

American Can strong based on well-sustained earnings, as well as rumors of a split; oils being bought based on success of curtailment efforts.

International Harvester to increase operations of local plants 50% within 30 days to meet large Russian order for tractors.

New York Life issued 187,758 policies for total of $538.1M in first half vs. 164,366 for $511.1M in 1929.

Western Union night cable rate New York-Switzerland is $1.90 for 20 words; total Western Union US-Switzerland cable traffic more than 10,000 per month.

No comments:

Post a Comment